The sequester: How a poison pill became a delicious blue-plate special

Walter Shapiro
Yahoo News

By Walter Shapiro

The most ominous sign in Washington this week? The speechwriters have simply given up.

There is nary a new argument, thought or metaphor to emerge from the White House or Capitol Hill as the dreaded sequester—D.C.’s version of a slasher movie—is slated to take effect late Friday night. With the indiscriminate slice-and-dice power of a Veg-O-Matic, Congress will chop $85 billion from the current federal budget, affecting everything from the Pentagon to the Centers for Disease Control.

In a rare show of political unity, no major figure in either party believes that this complete abdication of priorities (federal meat inspectors are treated the same as tourism planners at the Commerce Department) is a sane way to do budgeting. And in a typical show of Washington paralysis, no one seems willing to do anything about it.

Instead of round-the-clock negotiations, we get round-the-clock talking points. In his opening statement at his Wednesday briefing, White House press secretary Jay Carney sang nine times about the virtues of a “balanced” plan to reduce the deficit. In a Wednesday night speech to the Business Council, Barack Obama warbled about, yes, “a balanced approach to deficit reduction.”

John Boehner is equally culpable in abandoning any attempt at originality. In his press conferences and TV appearances, the House speaker keeps harping on the same argument that he used with reporters on Tuesday:  “Where’s the president’s plan to avoid a sequester? Have you seen one? I haven’t seen one. All I’ve heard is that he wants to raise taxes again.”

Wow. An oratorical choice worthy of Churchill: “A balanced approach” versus “Where’s the plan”? Small wonder that Washington is far more riveted by journalist Bob Woodward’s exaggerated claim that he felt threatened by a White House economic adviser than the debate over the looming budget sequester.

Beyond the well-deserved ridicule and the pointless suffering (fewer air traffic controllers are a real but over-hyped example), there are serious factors here that are apt to cast a pall over the next four years in Washington. The budgetary thicket seems inescapable. And neither party is likely to gain enough seats in the 2014 elections to cut through the underbrush.

So, what we are left with are these dismal realities:

Both parties have abandoned economic growth: More than a half century ago John Kennedy ran on the slogan we need to revive in 2013: “Let’s get America moving again.” Now, sadly enough, that line sounds more closely connected with Michelle Obama’s anti-obesity initiatives than economic policymaking.

All the tedious green-eyeshade arguments over budget arithmetic totally neglect economic growth. A sharp drop in the unemployment rate would do far more to reduce the deficit than all the current fiscal shell games in Washington.

Federal Reserve Chairman Ben Bernanke testifying this week before Congress warned that the economy would face a “significant headwind” from the draconian budget cuts, especially since they come so soon after year-end tax increases. Companies like Wal-Mart have already cited the end of the temporary 2 percent payroll tax holiday as a cause of diminished profit estimates. And the consensus of private forecasters is that actions by the government (the automatic spending cuts and the tax increases) could slice as much as 1.5 percent from 2013 economic growth projections.

It would be bad enough if Washington (the Federal Reserve aside) were doing nothing to aid the sputtering economic recovery. But what is actually happening is far worse—the deadlock of democracy pitting the White House against Congress is destroying jobs rather than creating them.

In truth, the blame falls more heavily on congressional Republicans than it does the White House. Peddling tax cuts as a solution for all human maladies including writer’s block, the GOP has thwarted every effort by Obama since the 2010 elections to stimulate the economy. Oddly enough, the Republicans were happy to join with the White House in jettisoning the one tax break that helped all working Americans—that 2 percent payroll tax cut that expired at the end of 2012.

But Obama does not deserve a free pass, either. Too often the White House has appeared more interested in scoring political points than in negotiating. The president is also complicit in accepting the idea that a grand bargain on long-term spending cuts is somehow necessary before the economy gets back on its feet.

The result is a bipartisan doctrine of austerity that has enshrined budget cutting as a major activity of government. Too often the political argument is over what to cut rather than whether such slash-and-burn tactics are appropriate at this moment. The problem with austerity is that it creates an austere future for millions of Americans. It is tragic that the unemployment rate remains at nearly 8 percent four long years after the financial meltdown.

Democrats are from Jupiter, Republicans are from Saturn: The sequester was calibrated with the precision of jewel thieves constructing an explosive charge to blow up a bank vault. The theory was that there were enough ticking time bomb provisions in the legislation to make both parties recoil in horror. Democrats supposedly would agree to anything to prevent the cuts in domestic spending from taking effect while Republicans would wave the white flag before sacrificing the Pentagon budget.

This 2011 deal—hammered out against the backdrop of the irresponsible GOP-inspired debt-ceiling crisis—was based on faulty assumptions. Since entitlements like Social Security and Medicare were protected from the budget knife, Democrats have been so far willing to grit their teeth and accept automatic trims in domestic spending. For their part, Republicans have proved less wedded to protecting every line item in the Defense budget than Democrats ever anticipated.  

As a consequence, both sides are going through the motions and negotiating only when the cameras are rolling. The no-chance-it-will-actually-happen sequester will have become the law of the land by the weekend. What started out as a poison pill has become the Washington blue-plate special.

The larger implications are that Democrats and Republicans not only disagree but they also completely fail to understand each other. Maybe this is a reflection of the polarization in Washington or the decline of negotiation as a way to pass legislation in Congress. But in a crisis, nothing is as potentially scary as misreading the intentions of your opponents.

In the end, the most dangerous implications of the sequester are psychological rather than budgetary. During all economic confrontations in the past four years, there was always a last-minute settlement or, at least, a postponement. When the curtain came down, invariably the debt ceiling was lifted and the government was funded. The preliminaries were often ugly and the economic consequences were sometimes depressing, but there was a semblance of rationality to the exercise.

This weekend, as the government arbitrarily cuts funding for domestic and military programs—regardless of merit or logic—it can truly be said that the inmates are now running the asylum.

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